Concept and Progression in the Field Currency

Digital Currencies 1
DIGITAL CURRENCIES
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Digital Currencies 2
Digital Currencies
This structured abstract reviews the concept of digital currencies through the evaluation of the
research of Robleh Ali, Florian et al., Reeuben Grinberg, and Gerald Dwyer.
Brief Summary of the Concept and Progression in the Field
Currency is one of the oldest and most complex aspects of human civilization. It is argued that
the development of currency has shaped human civilization over the years (Gilpin, 2014).
Today, the concept of currency has evolved, bringing forth the idea of digital currency (CNN).
Fundamentally, digital currency refers to a type of currency that is produced and stored
electronically. Unlike traditional currency, it permits instantaneous transactions and transfer of
ownership and may be used to purchase services and goods.
According to Ali (2014), digital currencies represent a new form of currency to the world and a
significant innovation in the field of payment systems. In his research, he examines the
economics of digital currency and risks associated with the same. From the perspective of
economic theory, whether digital currency may be considered as money depends on the degree to
which it acts as a unit of account, medium of exchange, and store of value. In his research, Ali
notes that although the currency can be used by anybody, its role as money is limited and only
few individuals are able to use it so far. At the time of his research, he indicates that this form of
currency did not pose any form of material risk to the financial and monetary stability of the
banking system.

Digital Currencies 3
Just like Ali, other researchers found the concept of digital currency as intriguing and, thus,
conducted pertinent research on the same. In the view of Dwyer (2014) and Grinerg (2014),
technology has made it possible for individuals to transfer digital currencies from one person to
another without the intervention of financial intermediaries. Digital currencies such as Bitcoin
utilize open-source software and peer-to-peer connectivity.
On the other hand, unlike Ali, Florian et al. (2014) argue that digital currencies propose a
diversion away from the established design of the traditional financial system infrastructure.
Mainly, this is because technological solutions and information systems like cryptographic
algorithms and peer-to-peer networks allow for decentralized organization, transparency and
operational security that oppose the centrally coordinated and less transparent contemporary
monetary system structures.
It is evident that the factors that Ali acknowledges within his own research have also been
considered in greater detail by other authors in the field. It can be noted that all researchers
recognize that digital currency innovations have changed the shape of the financial system. The
concept of digital currency has emerged as a fascinating phenomenon of the financial markets.
Common findings across the articles
Largely, Ali’s article focuses on the economics of digital currencies and their implications to the
banking system. It also explores the potential risks associated with the use of this currency on the
monetary and financial stability of an economy, and the extent to which digital currency has been
used as a form of money. In its hypothesis, the research seeks to find out the extent to which